I’ve been listening for many years and bought a $10 book and paid $50 for FPU a long time ago, but the sponsoring church refunded the money if you completed the course.
I think a lot of his money is made off of real estate and his seminars, but the vast majority of Dave Ramsey fans I know have never attended one. The radio show is free to listen to and you can get all his books from the library.
Maybe, but how come so many people in this country are drowning in debt or are unable to save for their kids college despite high incomes? I strongly believe personal finance is more than math.
But the point is, not everyone has no debt and manages like a finely tuned machine. If you don’t need a lifeline, fine.
I don’t find him overly religious in the broadcasts. He’s not saying “Trust God” or any of the other things, like “God put you there for a reason.” He’s not hocking ‘miracle water.’
So what if, in the past, he went bankrupt? This is today.
So some guy calls, has a 38k car loan, earns 22k. DR tells him to sell it, that even at a loss, the debt total is reduced. May be self evident to you, but not everyone else.
Yes, he made money. Yes, he’s an entrepreneur. But I can stomach that better than seeing others earning nearly a million in salary, then more in bonuses, just for being with a top name financial firm.
In the end, he’s* input.* The individual is free to agree or not, implement or not.
@cshell2, most people drowning in debt do not have above average impulse control, that’s why they need the needling Ramsey provides.
(and no, not all debt is a result of poor impulse control. There is some medical debt and some people just seem to be snake bit. But poor math skills and impulse control are the major contributors.)
Society as a whole loves shoving the consume and borrow mentality down everyone’s throats. When I first started in college the credit card companies were there handing out gifts to apply, student loans were “good debt”, even my own parents encouraged getting as much house as I could afford because it was an “investment” (ROFL at that one in hindsight). I find his viewpoint refreshing and I’m doing much better now with the mind change. It didn’t have anything to do with math.
OP here.
Thank you everyone! I got a good idea of who he is, what he does and why some people like his advise/show and why some people don’t.
I enjoyed reading everyone’s viewpoints, too. I appreciate it!
@MomofJandL did write “above average impulse control” as well as “middle school math”. But then even the latter (or at least the ability to apply it to out-of-math-class situations) may be questionable, as evidenced by college bound students on these forums having difficulty calculating their HS GPA themselves.
I’ve never listened to him, but his advice changed my sister’s life. She and her husband were drowning in debt. They followed his advice and now have zero debt, not even a mortgage, with two kids in college.
My engineering ds would laugh at the suggestion that he likes Ramsey bc he lacks math skills or impulse control. He was also raised in a household that avoids overspending and debt.
For my ds and dil, he provides encouragement to go against the mentality that surrounds them in their friend groups and society in general. We live in a disposable society which embraces the shiny and new. Want something? Buy it on credit so you can have it now. Saving up for a new car or fridge or trip or whatever and paying for it in cash bc you can afford it without question is not the norm.
Just reading CC is evident of the different POV. Taking out loans now for an expected ROI is why there is a college loan crisis. Does Ramsey take it too far? I don’t really know bc I don’t listen. But I do hear my adult children and their friends and our extended family’s young adults talk, and their friends and our relatives are all about having e everything now. They have no real concept of minimalism and saving now in order to have a higher standard of living in the future built on capital vs debt.
I listen off and on. As others have said, he’s good for low income, high debt, struggling to figure it out folks. There is a vast lack of basic financial education in this country and he serves as a very generic, low end resource.
Personally, I think he should stick to debt counseling and lose the investment / insurance themes. I guess everyone can benefit from hearing about learning to live within your means, but the investment / insurance stuff has to have context for it to have any value.
Mom- the reasons for the college loan crisis are manifold and quite complex- and there’s a LOT of research that shows that a small number of borrowers carry a huge and debilitating amount of debt-- but the typical borrower is responsible, pays off their loans on time AND end up in a far better place economically than if they hadn’t borrowed.
I borrowed for a graduate degree- and in 19 months (accelerated my two year program to cut down on the amount of time I would spend without a salary) I tripled my salary. Yes- that was a long time ago. But I’ve got nephews and cousins and nieces with much more recent experience with educational loans and the math is incontrovertible- a niece who was making 42K a year as a paralegal took on the debt for law school, took the big law job, paid off the entire loan after three years with her firm and now earns many multiples of her paralegal salary.
Much of the untold story about educational loans is about the predatory practices of the for-profit colleges. Many of them have changed their names over the last few years so it’s harder to Google them and find out what the story is. But this is not a kid from Indiana borrowing to attend Purdue. This is about kids borrowing for bogus degrees in “Travel and Tourism Management” which qualifies them for customer service jobs at the car rental counter of any airport in the country- a job which they could get with a HS diploma and a clean drug test. These are kids getting four year degrees in “court reporting” (again, you don’t need a college degree to become a stenographer) and four year degrees in criminal justice when a two year AA from a decent community college gets you to the same place- a job as a probation officer. My least favorite of these is the new vogue from the online, private, predatory colleges for degrees in forensics. These kids watch TV and think they’re going to become medical examiners (in my state, you need to be an MD) after taking online classes which teach outdated techniques in saliva and hair analysis.
It’s sad. But taking out loans-- in moderation-- for a legitimate four year college- is what gets thousands of kids out of poverty and into professions.
Buying a $900 cellphone? This I don’t get. Taking out a home equity loan to build a “home theater” in your basement? That’s a foolish use of debt IMHO. But the lifetime differential in earnings for a college degree vs. a HS degree is substantial. And the difference between the earnings of an LPN vs. a BSN-- especially one with advanced training in surgery or cardiac care-- for some kids, that won’t happen without the federally guaranteed loans. Yes- it would be great if kids could work their way through a BA like the good old days. Try stuffing that genie back into the lamp.
The formula of spending significantly less than your income so that you can save and invest it to eventually become financially independent (joining the capitalist class and having the ability to retire or accept involuntary retirement from the labor force) is not unique to any particular author or speaker. Besides Ramsey, other variants include The Millionaire Next Door and the FIRE (financially independent retire early) movement.
But perhaps some people who need to figure this out may find that specific authors and speakers are easier for them to follow than others. One would hope that they figure this out before they are in the “$250k income, kid going to college, no financial aid, but can only contribute $5k” situation.
I have known of Dave Ramsey for a long time, but never realized he infused his work with Christianity as well. I guess that could be off putting to people who are just there for the financial advice. I have never listened to him or read his books.
Learn something new every day.
Interesting. Is he too conservative?
I know someone who was always in major debt. We gifted her Ramsey’s book. In one year she paid off 17k in debt. She never would have believed it was even possible. She was ecstatic.
I think most people consider a credit card as their emergency fund and that’s not how it works. A lot of people have no concept of how budgets work or find they can’t stick to one. Ramsey simplifies the process. It works.
He is a Christian and it does play a lot into how he lives his life (obviously) which comes out in his show sometimes when he’s trying to explain why he feels the way he does, but I’m an Atheist (Agnostic maybe) with no interest in the whole God story, and never felt his religious side tracks were off-putting. Then again, I also send one of my kids to a Catholic school and I’ve heard enough of “I would never send my kids to a Catholic school!” condemnations from other non-religious people to know that maybe I’m just weird.
From Ramsey’s web site:
https://www.daveramsey.com/blog/how-to-invest-money
Critical response:
https://www.thebalance.com/why-dave-ramsey-is-wrong-on-mutual-funds-2466582
I wasn’t even aware of his Christianity for ages- and listened on the car ride home. It was a magazne or Wiki that mentioned it.
I think we’ll get YMMV on his religious views. Lots of media folks are religious in their lives. And his ideas do work for those who can follow them (whether or not it’s simple math.) I’m more afraid of Limbaugh and his ilk, who make their views seem holy grail to underinformed listeners.
Not too conservative at all, too heavy in equities and real estate, not enough in bonds/fixed income, and he recommends using advisors from his network instead of options that would have lower fees and expense ratios.
For people that really need his brand of motivation to get out of debt maybe they also need some hand-holding on what to do with their investments. But I’d say “all of it in index Target Date Funds” would be better advice than he or his advisors give, and is still easy to follow.
Why is it that if people disagree with other people, they are automatically labeled under-informed? Aren’t people allowed to have different opinions anymore without being labeled “ilk”? This goes for both sides by the way.
As far as Dave Ramsey is concerned; I listen and am a fan of his debt and life insurance advice, but not his investment advice for the reasons described above.
I believe his student loan advice comes from a mindset of what happens if you don’t finish and now don’t go from being a paralegal to lawyer. Now you’re still a paralegal, but with law school debt. Or the female doctor I heard who financed medical school, but now wanted to stay at home with the kids. She couldn’t because she still had too much debt. Not saying it’s right or wrong, but I think his plans are for worst case scenarios.
I don’t like Dave Ramsey and find his no debt approach to be overly simplistic.
Not all debt is created equal. As noted above student loans that allow someone higher earning potential isn’t bad.
I also don’t mind using debt as a tool to manage cash flow. We took out Plus loans to finance our kids college education and will pay them off fairly quickly.
So long as you aren’t stupid about it, debt should be a tool in finacjng a lifestyle you choose to live.